Stewart Information Services Corporation

Hello, and thank you for joining the Stewart Information Services Third Quarter 2026 Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have an opportunity to ask a question during the question and answer session. Instructions will be given at that time. Please note today's call is being recorded. Lastly, if you should require operator assistance, please press star zero. It is now my pleasure to turn today's conference over to Brian Glaze, Chief Accounting Officer. Please go ahead.

Thank you for joining us today for Stewart's third quarter 2026 earnings conference call. We will be discussing results that were released yesterday after the close. Joining me today are CEO Fred Eppinger and CFO David Hisey. To listen online, please go to the Stewart.com website to access the link for this conference call. This conference call may contain forward-looking statements that involve a number of risks and uncertainties. Please refer to the company's press release and other filings with the SEC for a discussion of the risks and uncertainties that could cause our actual results to differ materially. During our call, we will discuss some non-GAAP measures. For reconciliation of these non-GAAP measures, please refer to the appendix in today's earnings release, which is available on our website at stewart.com. Let me now turn the call over to Fred.

Thank you for joining us today for Stewart's third quarter 2026 earnings conference call. Yesterday we released the financial results for the quarter and I will kick off today's call with an overview of our outlook for housing followed by a review of our performance for the period and strategic direction broadly by business. I will then turn the call over to David so he can provide further commentary on our performance for the quarter. In the third quarter, the market began to set a new lower bar for residential housing. Market primarily driven by the rapid escalation in the 30-year mortgage rate throughout the quarter. In August, the 30-year rates moved higher than the same period a year prior, and the rapid increase continued rates around 7.5 into October. As I've seen in the past few years, buyers will very quickly move to the sidelines in a situation where rates meet or exceed 7%, or when rates move up very quickly. In Q3, we experienced both these scenarios, resulting in a below $4 billion existing home sales for two of the three months of the quarter, a decrease of about 3% to 4% year-over-year in August and September. We believe the residential market conditions will continue to decay into the next quarter. Considering this outlook, we will be very focused on business investments and expenses while continuing to capitalize on some of the market opportunities this disruptive market will create. In the third quarter, we delivered adjusted earnings per share of $1.33. Year-to-date total operating revenue was up 22% and adjusted EPS growth was up 8%. For the quarter, growth slowed to 13%. Our adjusted EPS delivery was below last year's third quarter as we saw a decreased margin for some of our businesses due to rapidly decreasing residential volume off historic lows. Our national commercial services business continued to deliver solid performance with overall commercial growing 90%. While the growth was less than our recent earn rate, our order growth is strong and our competitive position continues to improve. We did see a number of closing shifts in the fourth quarter, which is not uncommon in the changing market. We continue to be very positive on our improving competitive position and our future growth opportunity. In the third quarter, we also welcomed our title to the family, expanding our commercial energy and infrastructure team capabilities for servicing the telecommunications space. The acquisition of best-in-class talent has remained our strategic growth priority for the national commercial services and the addition of Tower Title as well as the strategic hires we executed last quarter will help us further bolster this business for the long-term success as these new hires ramp up in their seats and begin to convert business in the coming quarters. We have had a lot of momentum in this space in the last three years and we will continue to encounter some tough comparables for ourselves given the outside growth we've had. Overall, we will be positive on the large commercial and continue to see growth across multiple asset classes though that growth is often lumpy given the timelines and transaction sizes. Our direct operations bear the brunt of the slowing residential market and drove the majority of our margin reduction in title. Overall, our direct title operation business unit consolidated residential refinance of Main Street Commercial by 1% in the second quarter compared to the same timeframe last year. We saw residential volumes decrease by 3% and refi shrink 7%. That was offset by our mainstream commercial delivering 11% growth. Our growth plan for this business remains focused on strengthening our position as attractive MSAs to organic and inorganic efforts and continue to grow mainstream commercial. In 2026, we will see more opportunities present themselves in attractive geographies. Given market conditions, we will still focus on pursuing these opportunities, but we are sharpening our pencils even further to ensure they fit in our long-term financial goals. In the third quarter, we announced the acquisition of Radican Title, one of the oldest and well-respected title agencies in Texas servicing Fort Worth. This transaction is a great example of a strong strategic fit for Stewart as it strengthens our position in the Dallas-Fort Worth marketplace, giving us a Fort Worth stronghold. Our centralized title operations, which are included in our direct title revenue summary, includes our centralized refinance, institutional business, and reverse business. In the third quarter, we welcome ProTitle USA and DocuSolutions USA to this organization. The addition of these companies along with our existing offerings expand our scale of the title services for investors and capital market clients. In the third quarter, we groom this business 20% for these businesses. Finally, moving to our international operations, we focused on profitably growing our business. In the third quarter, we saw a slight deceleration of our non-commercial revenue by 1%. However, we have grown our revenue in this business unit by 4% year-to-date, which is solid near the Canadian residential marketplace that's been decelerating the existing home sales since September of 25. On the commercial front, we delivered $7.3 billion in revenue consistent sequentially with the second quarter, up behind the third quarter of 25 as we had a handful of very large transactions that closed the third quarter last year. We believe we are on the right track in our international operations and we will continue to build on the strong positions in these markets and continue to grow share. Turning to agency services, in the third quarter, we saw net revenues by 11% compared to the third quarter of last year. We are pleased with this given that the agents confirm the same challenged residential market as our direct operations. We are focused on growing this business through winning the business with new agents and expanding the wallet share of existing agents, with the emphasis on 15 target states in addition to the expansion of our commercial footprint for agents. We continue to make good progress on these priorities with residential premiums up 7% and commercial premiums up 25% in the third quarter when compared to the same timeframe last year. As mentioned last quarter, we took advantage of some market disruption and expanded our agency team, which we have and will continue to see the benefit of as they wake up and settle into their positions. While increasing market challenges will put pressure on future growth, we believe our ability to shift shares should continue. Turning to our real estate solutions business, in the third quarter, we grew revenue by 68% and 7% after removing the impact of two acquisitions we made this year, MCS and NAND. Our adjusted pre-tax margin slipped from 11.3% last year to 10.5% this year. The margin was driven by a significant slowdown in orders and revenue from existing accounts in informative research, our credit data business, and in appraisal. From a strategic perspective, we remain focused on continuing to expand our coverage and servicing of the top 300 lenders. Our suite of products and services is in good position in giving us even a great ability to cross-sell through our business. I am pleased that we are able to maintain our double-digit margins in these conditions and believe we will get to low to mid-teens margin delivery to the execution of our strategic priorities in a more stable residential market environment over the next two to three quarters. I believe we are setting a new floor in the residential market that will likely continue into the next quarter. We will react to market changes by taking needed actions will be careful to retain the resources needed to serve our clients and react to opportunities I believe will come from this disruption. We remain focused on being a resilient company that has a growing portfolio of operations that will deliver shared growth and improving larger performance over the next two to three years. Thank you for your time, attention, and interest in Stewart. As an enterprise, we are dedicated to being the premier title real estate services company. I'm proud to share that in the third quarter, we delivered our seventh dividend increase in just under six years, raising our annual dividend from $2.10 a share to $2.20 a share. We are committed to strengthening and growing the company for continual and lasting success while confronting the current challenging conditions. To our customers and agents, thank you for your trust and dedication to Stewart. We are committed to serving you with excellence. And to the Stewart team, I want to thank you for your dedication and perseverance. It takes considerable effort to grow a company and even more so to confront such a challenging residential housing conditions. Thank you for your commitment to the company. I look forward to seeing where we can take this company together. So, David, I'll now turn it over to you to provide an update on the results. Good morning, everyone, and thank you, Fred.